Price-setting in the French manufacturing sector : New evidence from survey data

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This paper reports the results of a survey conducted by the Banque de France during winter 2003-2004 to investigate the price-setting behaviour of French manufacturing companies. Prices are found to adjust infrequently; the median firm modifies the price of its main product only once a year. Price reviews are more frequent than price changes; as the median firm reviews the price quarterly. Firms are found to follow either timedependent, state-dependent or both pricing rules. Coordination failure and nominal contracts (either written or implicit) are the most important sources of price stickiness, while pricing thresholds and physical menu costs appear to have no influence.

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